Miscellaneous Flashcards
Closing Instructions
Master and Specific
Closing instructions are normally signed by the closing agent. The master closing instructions will be very similar from file to file, and the specific closing instructions will list specific conditions for the transaction. A closing agent will want to look for funding requirements, where to send documents, and where to send trailing documents and Final Policies.
In some instances, a buyer will also sign closing instructions.
RIGHT TO CANCEL (Refinance’s Only)
A Right to Cancel or Right of Rescission is typical for the refinancing of debt on a single family home- sometimes referred to as “the lottery form” it states that after signing, the borrower has 3 days in which they could cancel the mortgage.
i.e. If in the next three days you win the lottery, and don’t need a mortgage, you can sign and cancel.
There will be two places where people can execute this form- the borrower should never sign “in the box” as that will effectively cancel the mortgage- they should only sign the acknowledgment identifying they understand the rescission period exists.
Uniform Residential Loan Application / “the 1003”
The loan application is the information the borrower provided the lender in a typed form- as long as the borrower has had NO changes to employment, or taken out any new lines of credit, the borrower would simply sign where indicated- in the event of JOINT CREDIT both borrower would sign the first page indicating joint credit.
Amortization Schedule
Shows the application of payments to Principal and Interest based on the minimum amount of payments required through the term of the loan- on occasion will show PMI (private mortgage insurance)
The borrower may or may not have to sign this schedule. In the event the buyer makes additional payments, or a principal reduction, the amortization schedule is not relevant. It
First Payment Letter
The First Payment letter will indicate the total amount of the monthly payment required by the buyer, it will itemize Principal, Interest, along with escrowed Taxes, Insurance, or Private Mortgage Insurance.
The Letter will also state the date of first payment and the rate.
Often this will come with coupons in the event the buyer doesn’t receive a statement from the lender by the date of first payment.
Notice of Furnishing Negative Information
This form tells the buyer that in the event of Non Payment they may be reported, and it will negatively reflect on their credit score.
USA Patriot Act Information Form
This form requires obtaining 1 or 2 forms of ID from the borrower. Types of permitted IDs are listed on the form- the closing agent will need to fill out this form, and sign to its accuracy.
Compliance Agreement
The borrower agrees that in the event corrections are needed after closing, they will cooperate with the closing agent and lender to fix any required changes. Rate, Loan terms etc, are not able to be adjusted, however, this would cover typo’s missing dates, notary stamps, or other items deemed necessary by the Title Company or Lender.
Flood Hazard Determination
If the Borrower’s Property is ever deemed to be in a Flood Zone, (a designation made by FEMA) then the borrower will be required to carry a flood insurance policy on the mortgaged property in favor of the lender, until the loan is paid in full.
Borrower’s Certification and Authorization
The borrower certifies that all the information they provided the lender was true and correct, and that they didn’t provide fraudulent information for qualification.
It also Authorizes the lender to use the information provided, and share it with affiliates and other parties for the purpose of qualifying for the mortgage loan.
Equal Credit Opportunity Act Notice
States that the lender doesn’t discriminate based on an applicants race, color, religion, national origin, sex, marital status, age, (Protected classes in Fair Housing)
